Are key comics good investments?

[JazzMan]

One flaw I see in the idea that future generations having less buying power is that eventually the buying power of the Boomers will get transferred down to the next generations. Sure the Boomers will be selling comics for money, but they will ultimately be transferring that money back to younger generations, either thru purchases or inheritances. They can't take it with them.

 

Not a flaw - already took that into consideration. (thumbs u

 

Remember, it's not just the spending power side of the equation, but also the fact that you'll see nearly every comic book out there (or every piece of OA) turn over at least once in, say, the next 30 years. Right now, books are only getting turned over at the margin, because there isn't a net exodus of collectors (who are primarily Gen Xers and Baby Boomers) holding the more valuable books. But, eventually, that's not going to be the case. So, what happens when all of these books turn over in the marketplace at current/future values. The market won't clear without lower prices.

 

The fact is, even the current generation of collectors doesn't have the buying power to turn everything over at current prices, because prices have gone up so much. I mean, yes, theoretically, there is enough money out there to do so, but I'm talking about within the existing collector base. It doesn't take a rocket scientist to see the math isn't going to work once we reach that generational inflection point.

 

Every time I read your posts, Michael Douglas' voice speaks to me.

[Darkowl]

One flaw I see in the idea that future generations having less buying power is that eventually the buying power of the Boomers will get transferred down to the next generations. Sure the Boomers will be selling comics for money, but they will ultimately be transferring that money back to younger generations, either thru purchases or inheritances. They can't take it with them.

 

Not a flaw - already took that into consideration. (thumbs u

 

Remember, it's not just the spending power side of the equation, but also the fact that you'll see nearly every comic book out there (or every piece of OA) turn over at least once in, say, the next 30 years. Right now, books are only getting turned over at the margin, because there isn't a net exodus of collectors (who are primarily Gen Xers and Baby Boomers) holding the more valuable books. But, eventually, that's not going to be the case. So, what happens when all of these books turn over in the marketplace at current/future values. The market won't clear without lower prices.

 

The fact is, even the current generation of collectors doesn't have the buying power to turn everything over at current prices, because prices have gone up so much. I mean, yes, theoretically, there is enough money out there to do so, but I'm talking about within the existing collector base. It doesn't take a rocket scientist to see the math isn't going to work once we reach that generational inflection point.

 

Every time I read your posts, Michael Douglas' voice speaks to me.

 

[kav]

It's sad when I would bring comics to school to give away lots of kids wanted them-there's a demand there but hardly any kids get to go to comic stores so they won't grow up with a love for comics that creates collectors. Once comics were no longer available in stores kids stopped getting exposed to them and that could affect the future of collecting.

[Gatsby77]

I largely cashed out (sold ~8,200 comics) last year and am glad I did so due to many of the demographic shifts noted.

 

After taxes, I eked out a bit of money, but not much (i.e., under 10% total after taxes on a 4-8 year holding period) -- the good stuff did _really_ well, but I sacrificed profit maximization for speed.

 

Still, I considered it a massive success because what my collection ultimately amounted to was forced savings -- I lived well below my means--and with roommates--for far longer than desirable in order to build a respectable collection.

 

I essentially converted hundreds of dollars a month in saved rent / mortgage expenses to comic books over a period of 8 years. And when it came time to convert those comic books back into cash, I had an incredible nest egg.

 

Yes -- I would have done better in the market, but had infinitely more fun with my collection.

 

The key takeaway is that nearly every book I owned, regardless of its value, is replaceable--even the few Gerber 8s (which are generally harder to find than some 5s-6s because folks have looked out for/collected them for 25+ years now).

 

The three books I may not be able to see again or buy back a few years hence?

 

1) Startling # 10 (1st Fighting Yank) -- but even it comes around in decent shape every 4 years or so. Believe Heritage sold another already this year.

 

2) TMNT # 1 -- not because it's rare, but because I believe it will continue to appreciate out of what I feel comfortable paying for it in a way that even X-Men 1 and Avengers 1 will not.

 

3) Showcase # 4 -- See TMNT 1. Sold my copy ~1.5 years ago. It would already cost more than double to get it back today.

 

Every other book is easy to get provided you have money. And I'd bet prices will fall in the next 20 years on the vast majority as GenX'ers retire & sell out with few Millennials, etc. to replace them.

[BarryAllen]

It's sad when I would bring comics to school to give away lots of kids wanted them-there's a demand there but hardly any kids get to go to comic stores so they won't grow up with a love for comics that creates collectors. Once comics were no longer available in stores kids stopped getting exposed to them and that could affect the future of collecting.

 

Kids go to stores...?

 

My POV is that the key to ensuring comics have a future is capitalizing and expanding the digital space. Right now it is too expensive to buy a digital comic (same price as a store copy) and not enough awareness (only a few sites and comics are not advertised in mass media like other entertainment). Younger generations are only going to transition more and more of their reading and general interface into electronics, so in my mind the only way comics survive is to evolve the digital model.

 

The other question is whether or not reading digital comics will translate into buying paper comics, particularly key issues. My personal opinion is that delekkerste's POV is accurate and that the death of baby boomers will be the beginning of the end of comic collecting as hobby (both figuratively and literally).

[Darkowl]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

 

Except that some comics are in fact good investments,they are liquid. Maybe not 50's war comics,but I think I made a pretty good investment back in 1983 when I purchased my AF15 for 500.00.What does a 5.0\5.5 going for now? 25-28K? I am pretty sure I can sell that book in a heartbeat if I needed to. Let me see....at the least I made 24,500.00 on that initial 500.00,not bad I'd say!

 

Oakman, when you purchased your copy of AF15 in '83 for $500, were the naysayers proclaiming the same thing then as they are now? That the market will fizzle out in 20-30 years, rendering your comics practically worthless? I'm just curious as to how long this kind of thinking has been going on for.

[COI]

 

The fact is, even the current generation of collectors doesn't have the buying power to turn everything over at current prices, because prices have gone up so much. I mean, yes, theoretically, there is enough money out there to do so, but I'm talking about within the existing collector base. It doesn't take a rocket scientist to see the math isn't going to work once we reach that generational inflection point.

 

There are single collections out there that I don't think the market could absorb at current prices.

[delekkerste]

Oakman, when you purchased your copy of AF15 in '83 for $500, were the naysayers proclaiming the same thing then as they are now? That the market will fizzle out in 20-30 years, rendering your comics practically worthless? I'm just curious as to how long this kind of thinking has been going on for.

 

I suspect the thinking was more like, "who in their right mind would ever pay that much for a comic book?" rather than any talk about the market fizzling out because of any actual fundamental concerns. In fact, making the case that the market would fizzle out in 20-30 years would have made no sense back then on demographic grounds, because you not only had a whole generation of kids who had grown up on comics, but the comic book industry itself was in the midst of a resurgence that started in 1979 (and lasted until the early-to-mid 1990s) while the back issue market started to take off then as well.

 

People may have thought that $25K for an Action #1 was crazy, but the overall mood was quite bullish, with dumb kids like myself hoarding bagged copies of Uncanny X-Men and buying extra hot books like ASM #252 and Secret Wars #1.

[delekkerste]

 

The fact is, even the current generation of collectors doesn't have the buying power to turn everything over at current prices, because prices have gone up so much. I mean, yes, theoretically, there is enough money out there to do so, but I'm talking about within the existing collector base. It doesn't take a rocket scientist to see the math isn't going to work once we reach that generational inflection point.

 

There are single collections out there that I don't think the market could absorb at current prices.

 

Yup - definitely true in the OA market as well, where there are numerous collections out there whose owners even would not be able to replicate if they had to start from today's prices. The next generation has virtually no chance of doing so - it really is shockingly obvious.

 

Again, that's not to say that we've reached the cliff yet, or that you can't make money from short-term flipping, ferreting out collections and paying pennies on the dollar, or otherwise hustling for a living. But, paying top dollar now for keys to buy and hold for a decade or two or three is not likely to yield satisfactory long-term returns IMO.

[Darkowl]

Oakman, when you purchased your copy of AF15 in '83 for $500, were the naysayers proclaiming the same thing then as they are now? That the market will fizzle out in 20-30 years, rendering your comics practically worthless? I'm just curious as to how long this kind of thinking has been going on for.

 

I suspect the thinking was more like, "who in their right mind would ever pay that much for a comic book?" rather than any talk about the market fizzling out because of any actual fundamental concerns. In fact, making the case that the market would fizzle out in 20-30 years would have made no sense back then on demographic grounds, because you not only had a whole generation of kids who had grown up on comics, but the comic book industry itself was in the midst of a resurgence that started in 1979 (and lasted until the early-to-mid 1990s) while the back issue market started to take off then as well.

 

People may have thought that $25K for an Action #1 was crazy, but the overall mood was quite bullish, with dumb kids like myself hoarding bagged copies of Uncanny X-Men and buying extra hot books like ASM #252 and Secret Wars #1.

 

I would suspect the same thing as well. I was born in '83, and started collecting in the late 80's/early 90's, so I don't have that much insight as to what the comic book world was like before that. I do remember thinking that If I saved my collection, and kept it in good condition, then It would be worth money someday. Holy , was I wrong.

 

Btw, great link! I just added it to my bookmarks. It really breaks quite a bit down.

[delekkerste]

Almost any collectible (and I mean, almost - remember Beanie Babies) will appreciate over time from their original price/cost.

 

I've got a closet full of comic books bought from the late 1990s to the late 2000s that says you're wrong! I'd be happy to sell everything at cover price (even the #1s and hot books - but you have to take all the drek - DK2 anyone? - at cover price as well) and get my money back. I've also got a closet full of 1980s-1990s baseball cards back at my parents' house that ain't going up, ever. They're worth less now than they were in the early 1990s when most cards peaked in value. I'd be surprised if all those 1986 Topps wax boxes I bought back in the day have even kept up with inflation...I see a lot listed on eBay for $25-$35, but I suspect the market-clearing price is more like $10-20.

 

 

Every time I read your posts, Michael Douglas' voice speaks to me.

 

JazzMan, are you with me? I need to know if you're with me...

 

[thunsicker]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

 

Except that some comics are in fact good investments,they are liquid. Maybe not 50's war comics,but I think I made a pretty good investment back in 1983 when I purchased my AF15 for 500.00.What does a 5.0\5.5 going for now? 25-28K? I am pretty sure I can sell that book in a heartbeat if I needed to. Let me see....at the least I made 24,500.00 on that initial 500.00,not bad I'd say!

 

Oakman, when you purchased your copy of AF15 in '83 for $500, were the naysayers proclaiming the same thing then as they are now? That the market will fizzle out in 20-30 years, rendering your comics practically worthless? I'm just curious as to how long this kind of thinking has been going on for.

 

Back in the eighties no one would say it was a crazy investment, because in the eighties no one considered comics an investment. They might have said you were crazy to pay that kind of money for a comic, but you paid it because you didn't know when you would see a copy for sale again. If you did have to sell you would be selling back to the store you bought it from for 50 cents on the dollar. The comoditization of comics came with eBay CGC and the other auction houses. Now you can buy one whenever you want, as long as you can afford it and can get much better than 50 cents on the dollar if you have to sell. Collecting is slowly dying out and investing is taking over.

[Darkowl]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

 

Except that some comics are in fact good investments,they are liquid. Maybe not 50's war comics,but I think I made a pretty good investment back in 1983 when I purchased my AF15 for 500.00.What does a 5.0\5.5 going for now? 25-28K? I am pretty sure I can sell that book in a heartbeat if I needed to. Let me see....at the least I made 24,500.00 on that initial 500.00,not bad I'd say!

 

Oakman, when you purchased your copy of AF15 in '83 for $500, were the naysayers proclaiming the same thing then as they are now? That the market will fizzle out in 20-30 years, rendering your comics practically worthless? I'm just curious as to how long this kind of thinking has been going on for.

 

Back in the eighties no one would say it was a crazy investment, because in the eighties no one considered comics an investment. They might have said you were crazy to pay that kind of money for a comic, but you paid it because you didn't know when you would see a copy for sale again. If you did have to sell you would be selling back to the store you bought it from for 50 cents on the dollar. The comoditization of comics came with eBay CGC and the other auction houses. Now you can buy one whenever you want, as long as you can afford it and can get much better than 50 cents on the dollar if you have to sell. Collecting is slowly dying out and investing is taking over.

 

So when did people start considering comics as investments then? And when did people start saying that the hobby will end when the old school collectors are no longer a part of it? I'm struggling to find a defining timeline.

[COI]

 

The fact is, even the current generation of collectors doesn't have the buying power to turn everything over at current prices, because prices have gone up so much. I mean, yes, theoretically, there is enough money out there to do so, but I'm talking about within the existing collector base. It doesn't take a rocket scientist to see the math isn't going to work once we reach that generational inflection point.

 

There are single collections out there that I don't think the market could absorb at current prices.

 

Yup - definitely true in the OA market as well, where there are numerous collections out there whose owners even would not be able to replicate if they had to start from today's prices. The next generation has virtually no chance of doing so - it really is shockingly obvious.

 

Again, that's not to say that we've reached the cliff yet, or that you can't make money from short-term flipping, ferreting out collections and paying pennies on the dollar, or otherwise hustling for a living. But, paying top dollar now for keys to buy and hold for a decade or two or three is not likely to yield satisfactory long-term returns IMO.

 

I'd have to think that were true of most of the "best" collections out there. A point that I think we've both been making for years is that the current market activity, in addition to being a product of the "perfect storm" conditions of demography, CGC grading, internet commerce, the CPR game, and the mainstream success of comic-related films, is also fueled in no insignificant way by the collection equity built up by long time collectors in the decades preceding CGC. Some of the earliest record prices for very high grade material, particularly non-key SA books in super high grades, were set by long-time collectors looking to upgrade already existing high grade runs. When you're a Brulato type character, and your ASM 1 is a 9.8 bought raw pre-CGC, it's not unreasonable to go ham running up the price on an ASM 55 in 9.8 to replace a 9.4. And these price spreads for high grade set a precedent, and new collectors bought right in out of context and lacking perspective.

 

I can't even imagine a new collector today trying to put those kinds of runs together from scratch, let alone some kid trying to do it couple of decades from now.

[Lazyboy]

So when did people start considering comics as investments then?

 

Definitely by the 90s. But really, when significant money became involved.

 

And when did people start saying that the hobby will end when the old school collectors are no longer a part of it? I'm struggling to find a defining timeline.

 

Never? Just because comics can't continue to increase in value forever doesn't mean the hobby will end. It just means that market forces will do what they always do. Removing the demand that comes from the old school collectors and increasing the available supply from their collections can only lead to one thing.

[Darkowl]

So when did people start considering comics as investments then?

 

Definitely by the 90s. But really, when significant money became involved.

 

And when did people start saying that the hobby will end when the old school collectors are no longer a part of it? I'm struggling to find a defining timeline.

 

Never? Just because comics can't continue to increase in value forever doesn't mean the hobby will end. It just means that market forces will do what they always do. Removing the demand that comes from the old school collectors and increasing the available supply from their collections can only lead to one thing.

 

Maybe I'm reading too deep into this then.

[delekkerste]

Back in the eighties no one would say it was a crazy investment, because in the eighties no one considered comics an investment. They might have said you were crazy to pay that kind of money for a comic, but you paid it because you didn't know when you would see a copy for sale again. If you did have to sell you would be selling back to the store you bought it from for 50 cents on the dollar. The comoditization of comics came with eBay CGC and the other auction houses. Now you can buy one whenever you want, as long as you can afford it and can get much better than 50 cents on the dollar if you have to sell. Collecting is slowly dying out and investing is taking over.

 

Great points. While quality/key vintage comic books have been going up in value for decades, the "market" remained hugely illiquid, inefficient and structurally undeveloped until the Internet and third-party grading facilitated peer-to-peer sales. Which is why, to me, it's a bit laughable when people extrapolate price increases forward indefinitely because they've been going up since they were priced at 10 cents in 1938 - comic book prices may have gone up since then, but it was barely a real market and wasn't considered to be a serious investment for most of that time.

 

You're right - some here are too young to remember what the comic book "market" was like in the '80s. Getting 50 cents on the dollar back on resale at your local store is probably wildly optimistic from my recollection and experience!

[oakman29]

Comics are not a "good" investment long term from this point in time on.

 

Why?

 

some of the many reasons include

!. they are not liquid,

2. they are fragile, even graded.

3. they are currently at historic highs

4.there is no interest or dividend of initial investment

5. reasons 5 through 10 are even more obvious than 1-4

 

Except that some comics are in fact good investments,they are liquid. Maybe not 50's war comics,but I think I made a pretty good investment back in 1983 when I purchased my AF15 for 500.00.What does a 5.0\5.5 going for now? 25-28K? I am pretty sure I can sell that book in a heartbeat if I needed to. Let me see....at the least I made 24,500.00 on that initial 500.00,not bad I'd say!

 

Oakman, when you purchased your copy of AF15 in '83 for $500, were the naysayers proclaiming the same thing then as they are now? That the market will fizzle out in 20-30 years, rendering your comics practically worthless? I'm just curious as to how long this kind of thinking has been going on for.

 

Back in the eighties no one would say it was a crazy investment, because in the eighties no one considered comics an investment. They might have said you were crazy to pay that kind of money for a comic, but you paid it because you didn't know when you would see a copy for sale again. If you did have to sell you would be selling back to the store you bought it from for 50 cents on the dollar. The comoditization of comics came with eBay CGC and the other auction houses. Now you can buy one whenever you want, as long as you can afford it and can get much better than 50 cents on the dollar if you have to sell. Collecting is slowly dying out and investing is taking over.

 

So when did people start considering comics as investments then? And when did people start saying that the hobby will end when the old school collectors are no longer a part of it? I'm struggling to find a defining timeline.

 

Back then all we really had were catalogs,friends,and a few comic stores.I saw a book that I considered unattainable,and I think I only seen a couple in person at the time. I used to own a ton of sports cards,tons of rookie cards,because sports cards were crazy hot at the time. Someone bought all my cards,and the first thing I did was buy that AF15 off my buddy,yeah it seemed like crazy money,and my mom and dad thought I was an i diot.I didn't care.

[1950's war comics]

It would be great to have a map to follow, but we don't. Sans a map, I am forced to use past experience as a guide. While past performance is no indication of future results, would you pick Mike Trout or Stephen Drew to pinch hit for you?

 

I use past experience all the time. If I didn't, I wouldn't know what a boom and bust looked like.

 

The analogy about pinch-hitters doesn't make any sense in this context. You can look at batting averages from the current season or recent seasons to make an educated guess about how an individual will perform if you put him in now. On the other hand, the comic book market has gone from early stages (yes, it had been around for a long time, but it was a fragmented, undeveloped mess with AF #15s trading for 2 cents on today's dollar) to maturity over the past 30 years. The next 30 years will show the market go from maturity to late maturity or maturity to decline. Either way, it won't look anything like the past 30 years - you can throw out your historical roadmap and bet your bottom dollar on that.

 

Thank you for all your brilliant analysis , each and every one of your posts deal out solid financial wisdom , unfortunately many on these chat boards are drunk from the kool aid around here.

 

[BarryAllen]

It would be great to have a map to follow, but we don't. Sans a map, I am forced to use past experience as a guide. While past performance is no indication of future results, would you pick Mike Trout or Stephen Drew to pinch hit for you?

 

I use past experience all the time. If I didn't, I wouldn't know what a boom and bust looked like.

 

The analogy about pinch-hitters doesn't make any sense in this context. You can look at batting averages from the current season or recent seasons to make an educated guess about how an individual will perform if you put him in now. On the other hand, the comic book market has gone from early stages (yes, it had been around for a long time, but it was a fragmented, undeveloped mess with AF #15s trading for 2 cents on today's dollar) to maturity over the past 30 years. The next 30 years will show the market go from maturity to late maturity or maturity to decline. Either way, it won't look anything like the past 30 years - you can throw out your historical roadmap and bet your bottom dollar on that.

 

Thank you for all your brilliant analysis , each and every one of your posts deal out solid financial wisdom , unfortunately many on these chat boards are drunk from the kool aid around here.